Speculation continues to spread within Search Marketing circles as to whether or not Yahoo and Microsoft are planning to work together in some capacity. Even following the collapse of Microsoft’s efforts to acquire Yahoo for a massive $44 billion over a year ago rumours have reignited about the two companies working together following the recent launch of microsoft’s latest Search/Decision Engine Bing. This has been further fuelled by comments made from executives from both companies.

It is now thought the pair are looking to combine to create a more effective rival to search engine giants Google. Bing is said to be set to become the search provider on Yahoo.com allowing the two companies to compete for further market share and inventory.

A recent report from AdAge suggests that a deal is likely to be announced this week and could potentially give Microsoft up to a 30% share of the international search market. According to the report the deal would be structured as below:

“Yahoo would be allowed to sell search ads on Bing.com as well as its own site, giving it more search inventory to sell and making it a bigger player in the search sales front. It would also immediately be able to save millions by not having to maintain its own search infrastructure. The latest terms of the deal underscore Microsoft’s devotion to developing and owning technology vs. selling media.”

Basically, the idea behind this would be to cut Yahoo’s costs whilst opening a much larger revenue stream. In addition, the deal would allow Microsoft the opportunity to become a bigger player in the search market.

However, this deal is far from secured and until both parties can happily agree on way to effectively work together in may take time for this arrangement to be hugely positive for the businesses. Remember, both Yahoo and Microsoft have desperately struggled to organically improve market share by any meaningful percentages over the past few years and a deal between the two is unlikely to change this insantly.

Microsoft still have to ensure that Bing is a much much better product than Google for any significant changes yet.

Source: Mashable